Ethereum stands as the second most prominent cryptocurrency in the crypto world, trailing behind Bitcoin.
It’s a crypto asset with diverse utilities beyond just accruing value over time.
Currently, Ethereum has given rise to numerous projects, ranging from Decentralized Finance (DeFi) to Non-Fungible Tokens (NFTs).
This makes the native token of the Ethereum network (ETH) essential for participating in these emerging projects, contributing to the rising demand and valuation of ETH.
To delve deeper into Ethereum, here’s an in-depth analysis and forecast of its chart. I’ll be updating it every 15 days, so you won’t miss a beat. 😉
Ethereum (ETH) Chart
Ethereum Technical Analysis
It’s crucial to read charts and understand their context, such as identifying supports and resistances, checking the chart trend, etc. What technical indicators does the Ethereum chart show today?
1- Supports and Resistances
Supports are below the price, and resistances are above. Where are the levels located on this chart?
As you can see, Ethereum had recently broken through the $2,000 zone. From there, the price experienced a minor pullback and then began its significant uptrend, soaring like a rocket to reach $4,000. After a wedge correction, it surged again to $4,000, and today we’re witnessing a deep selling candle.
Have you been able to capitalize on this move?
2- Where to Enter and Where to Exit
If you were planning to manually exit the operation, you can forget about that idea. Placing your entry, exit, or even stop-loss price correctly is important.
You should consider what type of investor you are:
If you want to buy Ethereum for the long term (holder), you would wait for support zones to accumulate positions. You wouldn’t mind so much if the price oscillated. Now, if you enjoy trading (swing trader), you should be clear about where to place your entry, stop loss, and risk.
In this case, looking at the current price, we might identify a small entry pattern if the price continues to pull back to $2,700 or even down to $2,400. Your first target would be $4,000, and also keep a close eye on whether the price manages to break the historical highs of $4,870.
As you can see on the weekly chart, the price could potentially return to the $2,000 zone, although it might be less likely. What do you think?
Another fantastic option would be to wait for a strong breakout above $4,000 and enter on a possible pullback.
3- Weekly moving average
Surely, you’ve noticed that in the charts of the medium-term strategy (weekly charts), there’s always a moving average.
My advice is to define two clearly distinguishable colors for your moving average when it goes up or down. When the average constantly changes color, it indicates a sideways phase.
I’ve configured it as follows: The blue line indicates bullish moments. The red line outlines bearish phases.
4- Divergences
Divergence is the opposite of convergence. If converging means ‘moving towards the same point,’ diverging is ‘behaving in the opposite way.’
Therefore, in technical analysis, a divergence occurs when the price and an indicator exhibit opposite behaviors at their extremes. In other words, one rises while the other falls. Let’s analyze the Ethereum chart. What do you observe at first glance?
5- Price structure
Technical analysis serves to predict what the price will do.
We usually employ different techniques such as divergences with indicators, trendlines, patterns, etc.
But most importantly, it’s what the price ‘draws’ for us, known as the price structure. No asset moves in a straight line constantly. Sooner or later, there is a lot of tension in one direction, creating an imbalance between buyers and sellers that needs to be rebalanced.
This leads to the famous swings or impulses and retracements, forming structures of highs and lows in a certain direction.
Understanding how these movements are developing will provide clarity in detecting the trend of the asset you are observing. What’s happening with Ethereum?
Volatility is often a sign that the price is accelerating in a certain direction. To gauge Ethereum’s volatility, pay attention to Japanese candlesticks. Keep in mind that interpreting candlesticks in trading is a matter of common sense.
The larger candles represent price drops, while the smaller ones indicate the opposite: calmer zones.
Forecast for Ethereum
If you’ve made it this far, it’s because you’re genuinely interested in knowing what’s going to happen with Ethereum.
I’m not a fortune-teller, nor do I claim to be one, but it’s clear that in the short term, the most likely scenario for the price of Ethereum is a slight correction. However, you should wait for the zones I mentioned earlier to establish a buying pattern and continue riding the new uptrend. At least, that seems to be the most probable scenario for Ethereum. The significant surge we’ve discussed was driven by the launch of Ethereum ETFs, which, similar to Bitcoin, have been highly successful and created a substantial demand for the asset.
It’s important to monitor closely to see if a good buying opportunity arises, or if instead, the price reaches resistance and fails to break through. Remember to be patient and wait for the right entry point rather than trying to anticipate it.
What would you do? How do you plan to position yourself?
Ethereum Trading
As you already know, trading with Ethereum is not easy. Therefore, it’s crucial to educate yourself first to become profitable. Remember to store Ethereum in the safest ETH wallet in the world, Material Ether.
And, of course, don’t forget to follow the Bitcoin chart with me. Don’t buy just because the price reaches support; always wait for confirmation of the stop. If you have doubts or questions, feel free to join our Telegram channel.
For more in-depth analysis, check out our trend analysis of Bitcoin.
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